MILAN/LONDON, July 18 (Reuters) - European shares hit a one-month high on Wednesday, supported by currency weakness and a rally in tech stocks following well-received earnings updates and a record close for the Nasdaq. The tech index rose 2.5 percent with Ericsson up 8.5 percent after the mobile telecom equipment maker unexpectedly swung to a modest operating profit, while semiconductor bellwether ASML jumped 8.1 percent on forecast-beating results. The upbeat remarks from Powell, who will continue his testimony to Congress later on Wednesday, lifted the dollar, which in turn helped shares in Europe's export-oriented sectors and Germany's DAX rise.

BRUSSELS/STOCKHOLM (Reuters) - Deutsche Telekom is set to face a four-month investigation by EU antitrust regulators into its bid to buy the Dutch business of Swedish peer Tele2, two people familiar with the matter said on Tuesday. The move by the European Commission underscores its hard line against telecoms deals in markets where the number of players would be reduced from four to three and there are fears of consumers being hit with higher bills. A year later, it blocked CK Hutchison Holdings' bid to merge its Three UK subsidiary with Telefonica’s O2 UK, but then allowed Hutchison to combine its Italian mobile network unit with that of Vimpelcom after securing hefty concessions.

Tele2 (TEL2b.ST) has agreed a $3.2 billion takeover of cable TV company Com Hem (COMH.ST) in a Swedish installment of a global wave of mergers reshaping the telecoms and media sector. If the deal is approved, the new company would be able to sell mobile telephony services to Com Hem's household customers, while Tele2 would add fixed-line connectivity and TV services to its range of products. A deal had been predicted by some analysts after investment company Kinnevik (KINVb.ST), Tele2's main owner, bought an 18.5 percent stake in Com Hem in April last year to also become its biggest shareholder.